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A Random Walk Down Wall Street; Including a Life-Cycle Guide to Personal Investing

3.96 of 5 stars 3.96  ·  rating details  ·  8,941 ratings  ·  312 reviews

This gimmick-free, irreverent, and vastly informative guide�with over half a million copies sold�shows how to navigate the turbulence on Wall Street and beat the pros at their own game.

Skilled at puncturing financial bubbles and other delusions of the Wall Street crowd, Burton Malkiel shows why a broad portfolio of stocks selected at random will match the performance
Paperback, 499 pages
Published June 17th 2000 by W. W. Norton & Company
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Many years ago I bought this book about the stock market. In retrospect, it is the worst book I've ever bought because it made me believe in efficient capital markets. The author made his point with a lot of arrogance - just like finance professors did 15-20 years ago. At the time the markets very certainly not as efficient as the author believed. There have been several updates to the book, but the condescending voice of the author remains.

For the statistically interested, the problem with a lo
Todd N
From talking to friends and reading an internal financial mailing list at work I got the vague impression that this book was somehow too esoteric or controversial to bother with. I am very glad that I decided to read this book.

It's hard to work in Silicon Valley without being affected by Wall Street. When I started working I was interested in technology, not business and finance. Business and finance seemed a bit beneath me. (Actually, technology seemed a bit beneath me too. I was kind of a snot
Malkiel's been writing and rewriting this classic tome on investing for the last thirty-five years. I gave him 5 stars for being fully engaged in the process of revision. Sometimes I wish all authors would write (and rewrite) just one good book (and that actors would star in only one movie). But that's like asking investors to put their money in just a few low-cost funds and hold it there for decades ... hey, that's what Malkiel's talking about! So it's not the most exciting approach to investin ...more
Because I read so much, I often think that once in a while I should read something that might materially benefit me. So, when a relative gave me this book, I thought "why not?" and dove in.

The first thing I noticed is that Malkiel is a surprisingly gifted writer. He is capable of telling a good story, he's cultured enough to make interesting references, and he has that quintessential skill of all popular writers: the ability to present ideas clearly without dumbing them down. For someone in my p
This review has been hidden because it contains spoilers. To view it, click here.
Kit Pang
Great theories to learn!I can see why this became a classic for investors.

-The Firm-Foundation Theory(Fundamental Analysis)
-The Castle-in-the-Air Theory (Technical Analysis)
Key ideas:

This is a nice sum-up of the EMH and MPT. The author explains why fundamental stock analysis cannot beat the market, therefore the best way to invest is to buy an index fund. He started with the major financial bubbles and concluded that the stock market is very unpredictable and even the brightest mind cannot foresee the bubbles. He went on to explain why the market is very efficient, behavior finance, and why most fund managers cannot beat the market. He then analyzed different asset
Feb 23, 2014 Lawrence marked it as to-read  ·  review of another edition
Jarrod Jenkins
Burton Malkiel's "A Random Walk Down Wall Street" is the book that popularized passive investing. As a Princeton professor and board member of the Vanguard Group, Malkiel brought the practical implications of the efficient market hypothesis to the general investing public. The ideas in this book are now so ubiquitously accepted, that I actually learned very little new information. However, I am pleased to have experienced the original source of this powerfully simple yet effective investment phi ...more
A classic book on investing, I really enjoyed the first part of the book. Here are a few of the "morals" of this book:
-The "Firm Foundation Theory" or fundamentals of stock picking are based on the following:
1.)the expected growth rate
2.)the expected dividend payout
3.)the degree of risk
4.)the level of market interest rates

BUT, the two caveats are 1)expectations about the future cannot be proven in the present (hence the title of this book) and, 2.) precise figures cannot be calculated from under
Chad Warner
Jun 13, 2011 Chad Warner rated it 3 of 5 stars  ·  review of another edition
Recommends it for: investors
Shelves: finance, non-fiction
Investors are bound to have heard about this classic and it’s author, economist Burton Malkiel. In this book, he explains that the market is highly efficient, and no one can accurately predict its ups and downs; it’s a “random walk”. So, the best approach is passive, “buy and hold” investing using diversified index funds held long term. I recommend this book to investors of any level, especially those attracted to active, speculative investing.

The book begins with a fairly boring recount of seve
Probably the most useful book about money that I have read. One of those things you think you know about (yeah yeah the random walk blah blah. . . ) And more amusing than most also.

Scanning some of the reviews I deduce that people like this book if they believe in index investing and don't if they don't. I feel Malkiel's argument is very convincing partly because he demystifies a lot of what financial professionals do. For example, I have always wondered, when they tell you "if you do this you c
Feb 15, 2011 Clem rated it 4 of 5 stars  ·  review of another edition
Recommends it for: anyone who's serious about learning how to invest
I've always thought reviews that contain lines such as "This book has changed my life completely" is nothing more than a silly exaggeration until reading this book - I wouldn't say it has changed my life entirely, but it has definitely changed my perspective and outlook of the thorny investing world where you often have to trim the weeds and learn how to sow the seeds.

The writing is simple enough to understand for most budding investors, yet at the same time it appealed to the inner nerd from my
Jerry Kaczmarowski
This is probably the best book ever written on the investment side of personal finances. It goes into extensive detail as to why you should strongly consider index funds or ETFs rather than mutual funds, individual stocks, or help from a personal financial adviser. All 3 of these last alternatives come with a load in terms of either your time or money (or both).

First, Mutual funds are managed and rarely outperform the market. For this lack of performance, you get to give away a percentage each
Paul Abernathy
Overall, I thought this was a helpful overview of the financial markets and had some generally good advice for a regular person on how to invest and navigate the financial markets. The book gives some history of financial markets, explains the basics of fundamental analysis vs technical analysis (which I did not know until reading the book), talks about strategies people have used in the past to make money, explains ways risk of a stock is measured (like the beta measure), and so forth. The rand ...more
Steven Ure
Best finance/investing I've ever read. This book offers no get-rich schemes, it simply informs you about investments that are the least risky and offer stable returns. What more could you ask?

Remember that scene from The Graduate? Well, don't invest in plastics. Invest in Index Funds. Simple.
Indexing - a strategy I learned initially from other sources - is best described in this book and other books by John Bogle. The last decade has not been kind to indexers, but, if Warren Buffett is right (and he is mostly on finanical matters), indexing is the most sensible financial strategy for most investors, hands down.
Laura Hughes
This is the most legitimate, trustworthy, data-driven investing guide for laymen that I have found. It provides an in-depth background in market history and various popular methods of playing the market. Piece by piece, it explains (and debunks) those methods with logic and data. While it didn't change my strategy--I already believed in a "buy and hold" strategy with a portfolio of no-load, low-expense-ratio mutual funds or ETFs in broadly diversified index funds--it made me feel that I really t ...more
Great book for those who know that beating the market is hard. Only a small portion of fund managers beat the market consistently. Some other fund managers do it for a brief period of time, but then start failing because their methodologies were only suited for that particular time period. I also agree with Malkiel's balanced portfolio that he gives towards the back of the book. He leans towards Vanguard funds which provide quite a few choices in terms of no load funds with small management fees ...more
Barry Bridges
This was selected from a recommendation of ten books every millennial should read on investing and speculation. After covering the recommendations, I would put it about number three. Malkiel delivers a text book for understanding financial markets that does not read like a text book. While he does keep it interesting, he belabors his point. He is a bit pretentious, maybe even arrogant, but then he is from Princeton and sits on the board of several major corporations. It is good material, covers ...more
Great book. In this book, Burton lists almost all the investment strategies and explains the pros and cons of those strategies in a clear-cut fashion. I definitely recommend this book to those who are interested in learning about investing.
The first 90% of this book is spent trying to convince the reader of its basic premise, which could be summed up as:

"It is impossible to consistently out-perform the market as a whole. Most investors would be best served by just invested in a market index."

If you dispute that premise then he does a good job of demonstrating its truth, with plenty of good data and examples. If you are like me, and fully buy into that premise already, then the bulk of the book will be skimmed through, occasionally
Khalid Alnaqbi
For those who study finance, after reading this book, you'll realize that most of what you studied in finance (especially Investments courses) are useless. :')
Michael Wheatley
Lots of lessons (especially in the derivatives section) reminded me of my time in Farrell Jensen's Agricultural Economics class at BYU.

Being a conservative investor myself, this book resonated with me. It was reinforcement. But the book recognizes that not everyone has that view and basically says, "if you're going to pick individual stocks, here are some ways to minimize your risk" or "put most of your money in index funds, and use 5% to gamble with."

The overwhelming theme, though, is to inves
This is the individual financial investing book that ends all financial investing books. If you are completely new to the world of finance, you might want to start with something a bit slower like a "...for Dummies" book or something by Jane Bryant Quinn. Malkiel spends the first 75% of the book bashing popular trends in investing strategies. The last 25% comprises the constructive suggestions of where to put your money and how to do it.
Overall, the book was written very well and very accessibly
Most of the criticism of this book seems to come either from people who think they can consistently beat the market (good luck), don't seem to understand definitions, or don't understand averages and how cost affects results. I think Malkiel wrote a good book and has updated in to be relevant today even though the first edition came out decades ago.

While I didn't need convincing on the central points of the book, I do think he sometimes undermined the strength of his arguments by making suggesti
I was already sold on Malkiel's approach to the stock market before I even picked this book up -- I'm a big supporter of Wealthfront, the investment platform for which Malkiel serves as CIO -- but it was a valuable exercise to understand his reasoning in greater detail. A good representative quote:
The record of professionals does not suggest that sufficient predictability exists in the stock market or that there are enough recognizable irrationalities to produce exploitable opportunities to earn
Syed Ashrafulla
This book is not as impressive to me as it might be to the general reader. Malkiel's main message is that long-run trends are the profitable parts of stock investing. As a result, speculation is unprofitable to the general investor. My main issue is that his argument is largely an expansion of the Central Limit Theorem, which he simultaneously credits and discredits as is necessary to support his message.

My biggest issue is that his cause for the Efficient Market Theory is that the market adapts
It was a good read after reading Lars' book which was presented in a much clearer manner. The flow is a bit fragmented because of the many editions and thus many interjections and corrections throughout. The book begins with an economic and financial history, I liked it but it dragged on for too long. But there's a good coverage on investor psychology (most books are always about the individual and not other players in the market) and behavioral finance covering Kahneman's work so that was great ...more
Andrew Skretvedt
This book is perhaps _the_ classic counterpoint to some of William O'Neil's great books, like "How to Make Money in Stocks" or "The Successful Investor."

The strategy: diversify among asset-classes. For stocks, use unmanaged, inexpensive market index funds. Buy-and-hold, the longer the better. Want more return? Risk more loss.


Technical analysis gets a voodoo reputation because it _is_ voodoo. It's scientism. It flows from misunderstandings of probability in human-intuition, and the human cogn
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Bloomfield Public...: A Random Walk Down Wall Street 1 7 May 04, 2013 07:14AM  
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“Res tantum valet quantum vendi potest. (A thing is worth only what someone else will pay for it.)” 0 likes
“Tip of the Week If you bought $1,000 worth of Nortel stock one year ago, it would now be worth $49. If you bought $1,000 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, and traded in the cans for the nickel deposit, you would have $79. My advice to you…start drinking heavily.” 0 likes
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